Chinese premier Wen Jiabao gave an interesting interview to Financial Times editor Lionel Barber over the weekend.
First, you have to love the first words out of Wen's mouth: "I want to make clear here that I will be most sincere in all my answers, but I may not tell you everything."
Second, Wen endorsed the writings of Adam Smith -- well, one particular set of writings:
The society that we desire is one of equity and justice, is one in which people can achieve all round development in a free and equal environment. That is also why I like Adam Smith's Theory of Moral Sentiments very much.
In 1776, Adam Smith wrote the Wealth of the Nations. And in the same historical period, he wrote the Theory of Moral Sentiments. Adam Smith made excellent arguments in his Theory of Moral Sentiments. He said in the book to the effect that if fruits of a society’s economic development can not be shared by all, it is morally unsound and risky, as it is bound to jeopardize social stability .If the wealth of a society is concentrated in the hands of a small number of people, then this is against the popular will, and the society is bound to be unstable....
I think for quite some time this book has not attracted due attention or attention that it deserves. I think it is as important as The Wealth of Nations. He made a reference to the invisible hand only on two occasions in these books. One, he refers to the market; the other, he talks about the morality.
For those of you who were wondering, here's the relevant passage from Theory of Moral Sentiments:
The rich only select from the heap what is most precious and agreeable. They consume little more than the poor, and in spite of their natural selfishness and rapacity, though they mean only their own conveniency, though the sole end which they propose from the labours of all the thousands whom they employ, be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species. When Providence divided the earth among a few lordly masters, it neither forgot nor abandoned those who seemed to have been left out in the partition. These last too enjoy their share of all that it produces.